Perpetual Licenses vs. SAAS

SaaS (Software as a Service) is relatively new software product made possible by the cloud. In the past, the vast majority of software products were made available via one-time installs and used “perpetual licenses.” A perpetual license gave a business the exclusive, perpetual use of the software that they bought. Businesses were legally limited in the amount of times they could install each program, but up until the last 15-20 years, software companies had no practical way to prevent multiple copies.

Today, with Microsoft and Adobe both offering their business software suites on a monthly subscription platform, the industry is changing. For businesses, the difference between the former perpetual licenses and SaaS is significant.

Perpetual Licenses

Perpetual licenses cost more up-front, but a business could use one indefinitely if it was not a core part of your operations. Licenses can allow for selling your software once your company decides to stop using it. The disadvantages for perpetual licenses were substantial, though. The up-front cost of the software and the need to update any core components to your business created logistics and budget strains.

Many companies would have to update on a periodic basis. These updates required software engineers to install the new software, update old files, and upgrade out-of-date hardware. The install time created down times for each business. Individual employee’s computers all needed to be updated also. Installs could sometimes take weeks or months of planning.

SAAS

SaaS attempts to offer a solution to business’s many problems with perpetual licenses. The idea of software as a service is as old as “You’ve Got Mail”, where AOL offered dial-up software suites on a monthly subscription service. SaaS has only recently grown in popularity and usability as advances in networked computing (the Cloud) has enabled companies in some cases to offer cheap and free data to software users.

SaaS solves the problem of expensive installs because, once installed, the software is typically updated automatically for the life of the subscription. Also, the integrated nature of subscriptions gives support feedback immediately. This feedback gives information to the software company, enabling patches and customer support to be more efficient.

SaaS also creates interesting resources businesses never had with Perpetual Licensing. Cloud based control panels give companies the ability to control their business remotely, set up multiple offices without expending capital (employees work from home), and offer customer service 24/7. The cheaper installs (no one-time software fees) also give companies access to larger software suites. This allows for greater customization and integration of multiple business systems (Customer Service, HR, time management, accounting). Companies can order SaaS plans that are customized and implemented by a 3rd Party, reducing the costs of initial installs, and preventing the need for hiring software engineers, programmers and designers if software is not your business.

While there are some disadvantages to SaaS, for a business whose main thing is not software (manufacturing, service, retail, etc), SaaS can revolutionize the way you do business.

To find out how SaaS programs can benefit your business, please contact us.